Treasurer Scott Morrison has pounced on a new report into housing affordability, saying it concedes that abolishing negative-gearing and halving the capital-gains tax discount is nothing but a “tax grab”.
The Grattan Institute think tank has slammed governments over the past two decades for creating a housing mess by taking easy options rather than addressing the real problem of supply.
It warns housing affordability is getting worse, with young, low-income families the hardest hit in trying to buy a home.
And those lucky enough to get a mortgage are finding it harder to pay it off, given loans are larger and wages growth is low.
“It’s bad, it’s getting worse,” the institute’s chief executive Mr Daley told AAP summing up the outlook for housing if nothing is done.
The report released on Sunday says boosting housing supply would have the biggest impact on affordability, even if it would take time. It also cited cutting immigration as a last resort.
It says the states need to allow more housing to be built in both inner and middle-ring suburbs while replacing stamp duties with general property taxes.
It believes the Commonwealth can help with financial incentives for these reforms.
Mr Daley said limiting negative-gearing and reducing capital-gains tax will help in the short term but won’t help nearly as much as getting housing supply right.
“If you got rid of capital gains tax and negative gearing you might have some money to bribe the states with,” Mr Daley said.
Mr Morrison said the institute gives the game away when it admits that abolishing negative-gearing and halving the capital-gains discount are primarily about raising taxes, not housing affordability.
“Labor also seek to dress up their blatant tax grabs as being about housing affordability. It’s just another con,” Mr Morrison told AAP.
He makes no apology for doing the exact opposite by giving a tax cut to first home buyers saving for a deposit through its super saver scheme.
But Mr Daley says you don’t increase supply by giving people more money.
“You increase supply by freeing up planning,” he said.